It is welcomed news that one of the most valuable, underutilized pieces of state property in Boston will be put up for redevelopment. The Kneeland Street project holds enormous potential for economic and community impact. Given its scope, location, and the white-hot development market in Boston, the project could be a grand slam. The biggest threat to its success, however, is an out-of-control public process.
The Baker administration is to be commended for reinvigorating the state’s effort to move dormant public parcels into the private sector. A similar surplus real estate initiative was launched in the 1990s, by Governor Weld, that saw significant successes, and also some failures.
During that time, I managed many of the state’s largest surplus real estate disposition projects at the state Division of Capital Asset Management, or DCAM. Successful redevelopment of the former state hospital campuses in Foxborough, Danvers, and Waltham turned hundreds of acres of unused nontaxpaying, public properties into property-tax paying engines of economic development for their communities.
DCAM also moved dozens of smaller surplus buildings and open parcels in Boston and communities across the state to the private sector for development. Nearly $1 billion in private development was realized, creating jobs, new housing, and commercial, recreational, and industrial opportunities, while adding millions in local tax revenues for cities and towns.
We worked closely with local officials and community stakeholders to develop a consensus reuse plan for the parcels we sold. In most cases, we also had to get legislative authority for the disposition. As our program evolved, we learned a fundamental lesson that should not be forgotten as the Commonwealth and the City of Boston begin the public discussion of this potentially transformational project.
First, and foremost, the purpose of the Kneeland Street project needs to be firmly established as economic development, and not as a vehicle for public policy investments that reflect only special interests. This may sound obvious, but it is the key to success.
At DCAM, it became clear that when a surplus property project was viewed as a vehicle for public policy, that opened up Pandora’s Box. Myriad interest groups exploited the process to pressure state and local officials to shape the development plan to reflect their narrow agendas.
We saw some projects drag on through a combative public process that not only delayed action, but often resulted in projects getting loaded up with so many costs, either in real dollars or opportunities lost, that the economics of the project imploded. The Columbus Center project is the poster child of failure in this regard.
Conversely, when the goal of economic development was not up for debate, and the public process was focused on what was actually possible, projects moved more swiftly to a successful conclusion. And by the way, many of those successful projects also included significant public benefits, such as set-asides for affordable housing, land grants for public buildings like new police and fire headquarters, funds established for community projects, or acres of open space preserved for leisure recreation.
The key to leveraging those public benefits was understanding that they could not undermine the overall economic viability of the project. For example, if adding to the stock of affordable housing in Boston is an important goal to be addressed at Kneeland Street, then city leaders should allow sufficient density of development to cover the costs of the affordable set-asides.
The coming public process for Kneeland Street should be fair and transparent, but it should not be open-ended. A six-month window for this first phase of community meetings is more than sufficient. After that, the mandated Article 80 process in Boston and MEPA review at the state level will insure the key issues are addressed.
Everyone is entitled to voice their ideas about what should happen on the property, but not all those ideas are going to be realistic. So state, city, and community leaders who truly want to see this public parcel become a stunning new gateway for the city and a positive force for the surrounding neighborhoods must be clear that economic development is the prime objective.
To their credit, Governor Charlie Baker and Mayor Marty Walsh have both started this discussion with economic development as the priority. As the public conversation broadens to a wish-list of community investments that could be funded through the project, they must tread carefully, because it is a slippery slope.
For the Kneeland Street project to succeed, it must be economically feasible, financeable, and in-tune with the realities of the market. To disguise public policy investments as a private sector economic development will not work.
Robert Cohen is a cofounder of Cohen Partners, a communications firm based in Boston.